Rio Tinto reports record bauxite production but tariffs still sting

Meanwhile, tariffs remain the dominant narrative for commodities. The company was hit with about $300 million in gross costs from U.S. tariffs on its Canadian primary aluminum exports during the first half of the year.

“A substantial part thereof has been compensated by the related increase in the US Midwest duty-paid premium, which rapidly adapted to the 25% tariffs level in Q1, but, at the end of Q2, was not fully compensating for the 50% tariff,” the company stated.

Second-quarter bauxite production rose 5% compared to Q1’25 and 6% compared to Q2’24 to reach 15.6 million metric tons (tons).

Rio Tinto’s guidance range is between 57-59 million tons.

Alumina showed a more mixed result. Between the first and second quarters of 2025, production fell 6%, to 1.8 million tons. However, that’s a gain of 8% compared to last year.

Rio Tinto said the lower quarter-over-quarter output was due to “equipment reliability” at its Yarwun alumina refinery in Queensland, which required a rescheduling of shutdowns and maintenance in Q2.

Aluminum production held steady, adding 2% both quarter-over-quarter and year-over-year, rising to 840,000 tons.

Rio in the U.S.

Matalco, a joint venture operating five U.S. plants in which Rio Tinto holds a 50% stake, shuttered its only Canadian facility at the end of June. Still, production across all facilities rose 8% to 147,000t.

The Matalco operations would seemingly be a major beneficiary of tariffs, given their feedstock is mostly composed of recycled aluminum, which is not subject to tariffs, is readily sourced domestically, and supports nearly two-and-a-half times the billet capacity of the four primary smelters operated by Alcoa and Century combined.

The facilities focus on 6XXX-series alloy billet and now have an aggregate capacity of approximately 775,000 tons per year, following to the closure of the Brampton, Ontario plant.

Trade and markets

The global economy improved from the end of the first quarter as the tariff stand-off between the United States and China de-escalated, the company said, but geopolitical tensions and trade barriers remain near-term economic risks. The company is continuing to diversify trade and “the decline in exports to the US was more than offset by shipments to other regions.”

In the second quarter, the U.S. economy “held up, given resilient household consumption and private fixed investment,” Rio Tinto said. “The impact of tariffs is still feeding through to inflation and sentiment. The housing market continues to be weak, and building activities have been hampered by elevated mortgage rates and reduced labor supply.”